What “Game of Thrones” Can Teach Us About Debt

BLOG

By: Mike Randall

Posted: May 8, 2015

Experts share their tips and advice daily on BadCredit.org, helping subprime consumers navigate the world of personal finance.

As anyone who has read “Game of Thrones” or watched its popular HBO adaptation can tell you, this is a story that doesn’t pull any punches. Full of political intrigue, betrayal, violence and shifting allegiances, the show portrays a fictional world, but one in which we can clearly recognize certain parallels to our own.

But according to two economists, Dr. Matthew McCaffrey of the University of Manchester and Carmen Elena Dorobăț of Coventry University (formerly of University of Angers), there are valuable lessons in the series that can help us understand debt and the economies in which we live.

How Debt Impacts the Political Economy of Westeros

In the paper, McCaffrey and Dorobăț examine the networks of power that are derived from the use of taxation and from control of the Iron Throne’s treasury. They point out that the Lannisters, who currently (yet tenuously) control the throne, although renowned for their vast gold reserves, still prefer to use debt to finance their battles – not unlike certain governments we know.

Oversight of the treasury of King’s Landing, capital of the Seven Kingdoms of Westeros, is entrusted to the Master of Coin (more or less a Secretary of the Treasury) Lord Baelish, also known as “Littlefinger.” In his role, Littlefinger uses his power and position to line his own pockets and to create a vast sphere of influence.

The paper also discusses the theme of political obligation that derives from off-shore borrowing. When the Lannisters have exhausted the ability of the citizens of Westeros to pay enough in taxes, they turn to the Iron Bank of Braavos – an influence outside the realm.

Understanding the wealth — and debt — of nations

In an interview with the paper’s co-author Matthew McCaffrey, we asked him to explain just how the use (and misuse) of debt has led to the increasing conflict, political turmoil and upheaval within the Seven Kingdoms of Westeros.

According to McCaffrey, “The Lannisters used borrowed money the way most governments do, to win friends and influence people.” In the philosophy of the Lannisters, “it’s always easier to pay with a promise than with a coin,” — which is a bit at odds with their even more famous adage, “A Lannister always pays his debts.”

However, they soon found out the problem with accumulating debt; “when your creditors stop believing you’ll pay them back, they stop lending to you.” Or worse, “they might even start lending to your enemies if they’re a better credit risk than you.”

“The Lannisters used borrowed money the way most governments do, to win friends and influence people.”

Given the current economic climate in Westeros, what is the Lannisters’ best option when it comes to repaying their debts?

“If you want to pay off a debt, the first thing you have to do is stop spending,” McCaffrey said. “It would also mean ending all the wars they’re fighting and putting an end to their lavish spending. Once you stop spending, you can think about how to deal with your current obligations.”

When asked how Littlefinger’s actions contributed to the Lannisters’ debt situation, McCaffrey replied, “[Littlefinger] does more than simply tax, borrow and create money for the rulers to spend: he also plays a key role in hiding public debts and concealing the true cost of war, thus helping to keep the crown’s finances afloat … There is a line in the books that says, ‘A coin is as dangerous as a sword in the wrong hands,’ and Littlefinger is a prime example of that.”

“A coin is as dangerous as a sword in the wrong hands.”

How can we describe their debt situation using familiar, real-world parallels?

“There does seem to be an analogy between Westeros and the U.S. Monetary and fiscal problems abound in both places,” McCaffrey said. “National debt is skyrocketing in the wake of continued conflicts around the globe and domestic economic troubles. And public spending is increasingly seen as a solution to those troubles, despite the fact that it’s actually a contributing cause.”

And some fans may know the series draws inspiration from major events in European history, such as the War of the Roses (do the Yorks and Lancasters sound familiar?), some may be surprised that developments during our own lifetimes have hauntingly similar appearances in the series.

“Or in the world economy, the Lannisters might be analogous to Greece, while the Iron Bank of Braavos is the European Union. Greece wants to borrow, but they also need a way to roll over their existing debts, and they see the EU as the means to do that. And, of course, when you rely on others to bail you out of trouble, or give you good terms on bad debts, you only encourage more reckless borrowing and spending.”

Mike Randall is most knowledgeable in the areas of credit scores and credit cards, having written on those topics and others for the past eight years. He graduated from California State University with a degree in English literature, and he has an extensive background in personal finance studies. When he's not keeping BadCredit.org readers informed of changes in the subprime market, Mike’s hobbies include sailing and gourmet cooking. Connect with Mike on Google+.

Editorial Note: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Every reasonable effort has been made to maintain accurate information, however all credit card information is presented without warranty. After you click on an offer you will be directed to the credit card issuer’s web site where you can review the terms and conditions for your offer.

Advertiser Disclosure: BadCredit.org is a free online resource that offers valuable content and comparison services to users. To keep this resource 100% free, we receive compensation from many of the offers listed on the site. Along with key review factors, this compensation may impact how and where products appear across the site (including, for example, the order in which they appear). BadCredit.org does not include the entire universe of available offers. Editorial opinions expressed on the site are strictly our own and are not provided, endorsed, or approved by advertisers.